MSBs – LOCAL ROOTS, GLOBAL AMBITIONS

Export for Growth

“Encouraging Export as a Strategy for Growth”

The opportunity

MSBs possess some of the UK’s strongest brands, are well-positioned to exploit global export opportunities and capitalise on the strong reputation of the UK brand in international markets. However, MSBs are not exporting as intensively as they could be in comparison to SMEs and outward investment tends to be focused on Europe when there are many other opportunities in high-growth markets. There is, therefore, a real opportunity for MSBs to exploit export opportunities more as a means to business growth.

The evidence

MSBs tend to have a lower proportion of high-intensity exporters than smaller firms.

Evidence suggests that outward investment by UK MSBs has failed to rise over the last ten years. In addition, what involvement there is in overseas firms tends to be focused on EU rather than higher growth markets, with approximately three times more MSBs having invested in subsidiaries in the EU rather than in non-EU countries.

Foreign ownership of UK MSBs is substantial and increases the larger the MSB. In 2009, it was estimated that 41% of all MSBs had significant foreign ownership and this may explain the dynamism in this cohort of businesses.

“UK Trade and Investment (UKTI) will provide a tailored package of export support to an estimated additional 500 mid-sized businesses per year. UKTI and UK Export Finance will work with businesses to promote existing trade and finance support for mid-sized businesses, to raise awareness of export opportunities.” (Autumn Statement, November 2011)

The initiatives

UKTI and UK Export Finance are targeting mid-sized businesses to promote the value of exporting and highlight opportunities; extending the network of International Trade Advisers dedicated to MSBs, with over 20 now in place across UKTI’s English regional network. UKTI is on track to engage 500 new MSB clients this financial year.

UKTI’s trade support for MSBs now includes: a ‘mini-MBA’ for MSBs in international trade service in conjunction with Leeds University Business School; intellectual property expertise to maximise the export value of those assets; tailored training and information to identify routes to new export markets; and a “knowledge bank” of private sector export specialists.

Lord Green and John Cridland from the CBI jointly led two trade missions dedicated to MSBs in 2012 to Turkey and Russia (25 companies on each trip).

Want to find out more?

Export

For expert advice, information on trade missions and other opportunities find out where your nearest UKTI International Trade Advisor is.

For more information on specific products and services available to MSBs go to the UK Export Finance website or contact customer services: +44 (0)20 7512 7887.

Proportion of high-intensity exporting

The chart shows the percentage of exporting firms exporting 75% or more of their annual turnover. It shows MSBs are not exporting as intensively as they could be in comparison to SMEs. For instance, MSBs tend to have a lower proportion of high-intensity exporters than smaller firms.

Source: Aston University analysis of ONS data, 2011

5 Responses:

MSB initiative looks promising. Such companies looking to trade overseas also want a peer group network which is local that they can engage with. To borrow your strap line, there are plenty of private sector local networks ( BNI etc) but few focus on global business. I’m looking at creating something locally which is local but global and initial response excellent.

Have you spoken to your local International Trade Advisor [see Export pages], CBI office or Chambers. Accountancy firms can also be a good source of knowledge on networking. Export is very much at the heart of the strategy for growth and local networks/events etc… an important part of activities. The plan is to build up this type of activity for MSBs. Let me know if this does not answer your point.

Payment Risk: The presentation of this page makes no mention of commercial export credit insurers which provide a low cost, fast and reliable service for exporters and cover all destinations, not just the non-OECD destinations of UK Export Finance “ECGD”.
The benefit of export credit insurance is that , where appropriate, you can offer attractive open account payment terms, rather than always asking your customer to open an expensive bank letter of credit.
For more information about credit insurance options, contact your insurance broker. The British Insurance Brokers Association BIBA has a list of specialist credit insurance brokers.
Regards
Susan Ross
Chairman, British Exporters Association (BExA)

You are quite right. The private sector is intended to be first port of call. The role of UK Export Finance is to seek to provide support (subject to an assessment of risk) where the private sector will not or cannot take on the risk. Thank you for flagging BIBA as a point of contact to find insurance brokers.